How convenient would it be if homes could be exchanged as easily as the clothes or shoes bought in a mall?
Unfortunately, that is not possible, and hence a lot of caution needs to be exercised before closing on a home. We bring some pointers that could help you.
Reevaluate the reason to buy a home
It is easy to get swayed by peer or family pressure and make that decision of buying a home.
Culturally, Indians perceive owning a home as a measure of success. But let that not be the reason for buying a home. Since it is a big financial decision, spare some thought and analyse your reasons for buying a home.
Zero in on the right property
Since you are making one of the most important decisions of your life, it is very important to spend some time and effort in scouting for the right property.
The location, amenities provided, the scope for future developments in the area and connectivity by public transport are some of the points that you would need to check.
Getting a good lawyer to check on the legal matters and clearances of the property will be a good idea, especially if you are buying a standalone house. Visit the property more than once. At the same time, do check out the price and any special schemes/offers that you could make use of.
Analyse your finances
Now that you have an idea of which home you would like to zero upon and its cost, go through a diligent exercise of assessing if you could fulfil all your financial obligations and yet service the home loan comfortably. Learn about the down payment clause from the developer.
Make sure the down payment required is well within your budget. Also, contact various banks and financial institutions for loans. This will give you a good estimate of the interest payable on the amount of loan. Ensure you can maintain a debt to income ratio of 40%.
Check your credit score
The credit score is a numerical expression of your credit worthiness. All your credit behaviour (credit card dues repayment, loan repayment) is recorded to arrive at your credit score. Unlike your waist size, a higher credit score is always better!
Loans are sanctioned to those with scores higher than 700. Did you know that a higher credit score can get you a lower rate of interest on your loan?
So, it makes it worthwhile to know and improve upon your credit score before you apply for a loan.
Choose the right lender
Choosing the right lender is as much important as choosing the right property.
Home loans are long-term commitments. So, choose a lender who you would be comfortable with. The bank where you already have a relationship would be a good choice. In case your credit scores are lower, then you may need to approach a financial institution instead of a regular bank.
Prompt after disbursal services like issue of account and interest paid statements are equally important.
So closing in on the right home does not end with choosing just the home, you would have to secure the right financing option as well.
This article was originally published on www.thehindu.com 
I want to buy a home, but I’m not sure how to choose one. It makes sense that I would want to find a few different properties that speak to me and then narrow it down from there. That way, I won’t be wading through tons of different options.
Thankyou for sharing these key points. Buying a home is life time investment & hence it should be given a proper thought. Great job, going through these points can really help people in coming to a decision.